Processors’ Perspective: Farm Bill Debate Continues

November 6, 2013 — It looks like the Farm Bill debate is finally nearing a conclusion and dairy policy remains one of the key issues yet to be resolved. IDFA’s Jerry Slominski provided the

Jerry Slominski, IDFA

Jerry Slominski, IDFA

Processors’ Perspective on Wednesday’s DairyLine Radio program:

Given the fact that the House of Representatives voted down supply management by 291-135, a more than 2-1 margin, even season veterans of many Farm Bill’s like Mary Kay Thatcher, the lobbyist for the American Farm Bureau, are predicting that the controversial stabilization program is not very likely to be included in the final Farm Bill.

As a result it is becoming clear that Congress is coalescing support behind the Dairy Revenue Insurance Programs that are both in the House and Senate bills, looking at ways to help and improve that important policy.

Just this week, for example, Dr. Marin Bozic from the University of Minnesota released a paper concluding that both the House and Senate dairy titles will be “very effective in providing catastrophic dairy margin insurance.”

Dr. Bozic recommends that Congress insert a six month time lag between when a farmer decides to sign up for margin insurance and the start of the coverage period. He says this is an important feature to include in the farm bill for dairies because they will help stabilize prices and insure that decisions are based on risk management rather than gaming the system to maximize indemnities from the government.

Those who are concerned over the possible cost of the insurance  programs are surely taking a look at Dr. Bozic’s recommendations.

Another dairy compromise is recently proposed by academics at Ohio State and Illinois. This option would allow farmers an annual sign up choice between either the MILC program or the new margin program, giving greater flexibility in this management option to both small and large farmers under a variety of situations

As the Farm Bill conference moves forward, its members will gravitate towards the areas where there is strong bipartisan consensus. In dairy, we believe they will look to improve upon the proposed new margin insurance program that both producers and processors support. That program is a common ground, compromised dairy policy that has been endorsed by both the House and Senate and will allow our dairy industry to grow and thrive.

Processors’ Perspective

February 6, 2013 — IDFA’s Jerry Slominski has this week’s Processors Perspective:

We think that the farm bill extension, included in the fiscal cliff agreement, was the right approach for dairy. While we support reforming our dairy policies and agree that Congress needs to take a longer look at our farm program, it is not a failure that Congress did not pass a BAD farm bill. It is an opportunity to focus on what is most important to us as an industry to work together on what we all agree on.

Nearly everyone agrees that dairy farmers need a safety net, then let’s get together and support programs that help producers through difficult financial times. But the divide over supply management is real and wide, despite what you may hear from its supporters.

The evidence that supply management won’t work is big and getting bigger. Supply management hasn’t worked in other countries, and it has not worked here with other commodities. As a result, opposition to the policy is growing and getting bigger. Rather than something that can be forced into a last minute budget bill, dairy supply management is a major impediment and stands in the way of getting a five year farm bill through Congress.

Even the American Farm Bureau Federation seems to be looking for a way towards consensus. During their annual conference, they approved a dairy policy study committee and were quoted when asked about current dairy policy reform efforts, that “we wouldn’t have supply management as part of that package” except that they are worried about available funding for margin insurance on its own. My translation is that they know it is bad policy to limit growth and exports but believe is it necessary for budgetary reasons.

Well, they do not have to worry. The Congressional Budget Office reviewed a proposed margin protection plan for dairy producers that was not tied to the so-called stabilization program, and reported that this plan cost slightly less than the Dairy Security Act with supply management. So funding is not the issue, it can be worked out. It means that you can have a margin insurance program just like other ag sectors, without the government telling you how to run your farm.

That stand-alone approach, authored by Representatives Bob Goodlatte (R-VA) and David Scott (D-GA), would authorize a margin protection program without USDA-imposed limits on production. Consumer groups, taxpayer advocates, the restaurant and food industry, and a growing number of dairy farmers agree that this is a better approach to reforming dairy policy.

Audio Version:

Processors Perspective: Dairy Security Act Proposal Loses Momentum

March 6, 2013 — Jerry Slominski, IDFA’s Sr. VP of Legislative Affairs has this week’s Processors’ Perspective:

Processors Perspective on Flavored Milks

On the farm, milk comes in only one flavor but, as you take a walk down your grocery store aisle or a school lunch line, you’ll see many more, according to Michelle Matto, Assistant Director, Nutrition and Labeling at the International Dairy Foods Association. Speaking in Wednesday’s “Processor’s Perspective,” Matto made the point that flavored milk encourages kids to drink milk.

Chocolate has been joined by strawberry, vanilla and other flavors to tempt the tastebuds of the American consumer, according to Matto, while providing all the nutrient benefits of milk.

Chocolate, and other flavors of milk, start with white milk and have flavoring and sweeteners added, she said. In general, they meet the standard of identity for milk, including the required levels of milk solids, and are available in a variety of calorie and fat levels.

There are also rich “milkshake” type products for people looking for a special treat and there are fat-free, no sugar added products for those that want great taste and nutrition with fewer calories, according to Matto.

She reported that, in 2007, almost 4.4 million pounds of flavored milk was sold in American retail stores; or about 8 percent of total retail milk product sales. Per capita consumption was 14.5 pounds, an increase from about 12 pounds per person in 2000 and “is an area of growth amid the continued decline in milk consumption,” she said.

While children can select from a variety of milks, Matto said it’s not surprising that most milk sold in schools is flavored, with the majority being lowfat. “This is a great option for children to enjoy the nine essential nutrients of milk,” she said, and “It’s particularly important for milk to be attractive to children because most kids over the age of 8 are not drinking enough.”

Dairy processors are working to formulate new flavors and products with different levels of fat, sugar and calories to meet the demands of consumers, especially school districts, Matto reported, and these products may use different flavoring systems, or a combination of caloric and non-caloric sweeteners, while still meeting the standard of identity for milk.

“By providing more choices, milk can better compete with other beverages,” she concluded. “When adults and children drink more flavored milk, they drink more milk, getting the nutritional benefits and supporting the dairy industry.”

Processors Perspective: Add Yogurt to WIC program

Dairy processors are on board with the federal government buying additional dairy products to help struggling dairy farmers, according to Peggy Armstrong of the International Dairy Foods Association.

“When you take a look at how this funding could be used by one program, USDA’s Women, Infant and Children’s program, or WIC, it’s clear that this approach has long-term benefits for consumers, dairy producers and processors.”

The WIC program provides nutrition education and retail food vouchers to almost 10 million low-income mothers, infants, and children, according to Armstrong, and dairy products are a critical part of its nutritional food packages because they provide nine essential nutrients and the protein and calcium that are especially important for women who are pregnant and young children.

IDFA estimates that approximately $2 billion will be used by WIC participants to buy dairy products, Armstrong reported, however due to changes in the program, WIC does not allow yogurt to be included, despite a recommendation to do so from the Institute of Medicine. In 2008 USDA said it would cost an additional $88 million a year to allow for the yogurt purchases, which was not part in the budget.

“Today, we have the opportunity to use some of the emergency appropriation to add yogurt to the WIC program,” Armstrong said. “Offering yogurt as a dairy option for mothers that use WIC would introduce a whole new generation to its nutritional health benefits, increase demand for milk in many states, and help bolster long-term demand for dairy products among a segment of the population that so critically needs it.” “It is time to ask USDA to include yogurt as an allowable dairy product under the WIC program,” she concluded.

Processors Argue Against Supply Managment

June 5, 2013 — This month’s Processors Perspective is with Jerry Slominski, head of the government affairs team with the International Dairy Foods Association.

Processors Oppose Proposal to Increase Milk Solids in Fluid Milk

IDFA’s Peggy Armstrong gave the “Processors Perspective” in Wednesday’s DairyLine, reporting that, in August, the Food and Agricultural Policy Research Institute issued research findings on the proposal to require national adoption of higher nonfat-solids standards for fluid milks, which have been required under California state law for decades.  

According to the report, the added milk solids, limits consumer choices, raises milk prices, and unnecessarily increases costs for government-run nutrition and feeding programs. Armstrong added that “Contrary to encouraging low-calorie options in the marketplace, the added solids will increase the calories per serving of milk.”  One key conclusion of the report, she said, is that such a policy change would result in an average increase of 17 cents per gallon in the retail price of fluid milk products due to the added cost of the additional nonfat solids. The report notes that “Fluid milk processors will have additional capital costs for storage tanks and other equipment that will be necessary to handle the increased need for nonfat solids.” 

“Higher standards for nonfat solids in milk have not increased consumption in California,” Armstrong argued, “In fact per capita fluid milk sales are lower in California than in the rest of the nation.”  “IDFA believes that dairy policy proposals that could reduce milk consumption and limit exports are not good for the future of the U.S. dairy industry,” she concluded. “Instead we need proposals that focus on ways to make our industry more competitive with other beverage choices in our domestic markets and ways to promote exports in the growing world market for dairy products.”

Processors recommend government feeding programs…

Dairy processors have made some recommendations to the new Agriculture Secretary on ways to improve government feeding programs and increase demand for dairy products. The international Dairy Foods Association’s (IDFA), Peggy Armstrong, said in Wednesday’s “Processor Perspective” that, “With the recent steep drop in farm-level milk prices, dairy producers are beginning to feel the full impact of the global recession and, while it’s likely that the support programs under last year’s Farm Bill will be triggered, they may not be enough to balance supply and demand.” 

 

Historically, many surplus dairy products bought by the government go into storage or wind up competing with other commercial products, Armstrong charged, which can drive prices even lower.

 

“IDFA sees another way,” Armstrong said, and, in a letter to Secretary Tom Vilsack, IDFA President and CEO Connie Tipton asked USDA to take a careful look at what it can do to bolster dairy demand in ways that will increase access to healthy dairy products for a growing number of needy people, outlining a three-point plan.

 

IDFA urged USDA to convert any surplus into consumer-oriented dairy products, using dollars that otherwise would be spent on transportation and storage. Updating specifications for products purchased under the Dairy Price Support Program to reflect current commercial practices would make it easier for companies sell products to the government under this program, she said.

 

Currently most dairy products aren’t purchased under the price support program. So, as a second step IDFA recommends “stimulus purchases” of products such as yogurt, and additional funding for reduced-fat and lower-fat cheeses that can be used in schools and other institutions. 

 

Thirdly, IDFA encourages USDA to finalize the Special Supplemental Nutrition Program for Women, Infants and Children rule to include yogurt, which was recommended by the Institute of Medicine, according to Armstrong.

 

“We believe this approach creates a better safety net for farm prices, and gets more products moving to consumers, many of whom are losing jobs and depending on food assistance to feed their families,” she concluded.

 

On December 18, 2008, the Environmental Protection Agency published a final rule that exempted animal waste from emissions reporting under certain EPA regulations. In this same rule, however, the EPA determined that another type of reporting is still required and the effective date for this rule is January 20.

 

There’s a lot of confusion over what EPA is going to require of dairy farmers and there have been threats of lawsuits from environmental groups and from the dairy industry over this rule. Want more dairy news? Click Here

IDFA Backs Dairy Product Donation Program

November 26, 2014 — This month’s Processors’ Perspective is with Ruth Saunders, IDFA VP, Policy and Legislative Affairs:

IDFA is a strong supporter of the Dairy Product Donation Program, one of the elements of the dairy safety net included in the new Farm Bill.  The program will help dairy farmers by increasing demand for dairy products when profitability dips catastrophically, such as the situation in 2009.  The donation program would lead to an increase in the farm milk price by providing funds to be used to increase sales of dairy products.

USDA has issued its final rule on the Margin Protection plan and is asking for comments, which are due by December 15th. IDFA has put our thoughts in, stressing the importance of proper timing and urging USDA to donate a variety of dairy products, and to use a variety of distribution methods including vouchers.

We noted that the program must be able to start and stop quickly, as required by the statute, to avoid any market distortions that could harm dairy’s competitiveness. This may be difficult given that milk marketing orders have time lags between when farm milk is marketed, minimum prices are established and payment is made.  According to the rules, USDA would not be allowed to store dairy products for giving out in the future, they would be required to immediately donate the products to needy consumers.

We strongly believe that the program should spread donations across the full range of dairy products in order to minimize market disruptions.  And, by including products with higher minimum regulated prices, especially fluid milk, the program we believe will have the best chance of achieving the greatest impact on farm milk prices.

Donating refrigerated fluid milk could be a challenge.  We proposed that USDA use vouchers, like a coupon, that low-income consumers could exchange for milk in the supermarket.   We pointed out a number of effective voucher programs that USDA currently administers, and that have proven to be effective.

Distribution methods that can accommodate a high volume of dairy products during short time intervals will provide the greatest and most immediate impact on farm milk price recovery – which is the principal goal of this new Farm Bill safety net program.

Latest Negative Milk Study is Misleading

November 5, 2014 — You’ve probably heard a lot of headlines recently, calling into question the benefits of milk for stronger bones and fewer fractures. These are based on a

Michelle Matto, RD and IDFA's Nutrition and Labeling Consultant

Michelle Matto, RD and IDFA’s Nutrition and Labeling Consultant

recently published study that looks at the diets and health of Swedish men and women. However, these headlines and the accompanying news articles are based on an overly simplistic reading of the actual study that was published in the British Medical Journal. That’s according to registered dietician Michelle Matto, who joined us on Wednesday’s “Processors’ Perspective” segment on DairyLine Radio, sponsored by the International Dairy Foods Association (IDFA):

The research suggests there is a relationship between higher milk consumption — meaning more than three glasses per day — , and higher mortality in men and women and higher disease risk and hip fracture in women.  It compared people with higher milk consumption to those who consumed  just one glass of milk per day. But the design of this study can only identify associations between diet and health outcomes, it cannot demonstrate cause and effect. There is also the possibility of other factors that may have affected the health of the study participants.

These limitations were actually identified by the study authors themselves, noting these findings should be “interpreted cautiously.”

This is only one study. It is important to remember that there are also many studies that show that milk and dairy products help support strong bones. Healthy diets and nutrition recommendations should be based on the full body of evidence, not a single study.

At this time, there is no need to change nutrition recommendations based on a single research study. There are hundreds of studies supporting the role of milk in a healthy diet. Again, this is just one study, and this type of research can only show a potential association, not a cause. The National Osteoporosis Foundation, American Academy of Pediatrics and the 2010 Dietary Guidelines for Americans all support milk’s role in a healthy diet – for bone health and beyond.

I hope you will be able to share this information with your family, friendsand neighbors, who might be a little concerned about what this study means for milk.

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Michelle Albee Matto is a registered dietician and holds a Master of Public Health degree from the University of North Carolina-Chapel Hill and a Bachelor of Science degree in nutrition from Russell Sage College in Troy, N.Y. She is an active member of the American Dietetic Association and the Society for Nutrition Education.  She works exclusively for IDFA as a nutrition and labeling consultant. Contact her at amfoodnutrition@gmail.com.

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